Preparing for Retirement

8/13/2021

Planning for retirement is an essential part of your financial journey. Although it may seem far away, it’s never too early to start planning to make sure you and your family are prepared financially for life down the road. Here are a few simple ways to get started:

Start now. If you haven’t already, open a retirement account. With a variety of retirement savings accounts, such as 401(k) plans, Individual Retirement Accounts (IRAs), mutual funds, and more, you have plenty of options to help set you up for success. And the earlier you start, the better off you’ll be. These types of accounts typically accrue compound interest, meaning the interest you earn on a balance also earns interest. So, that compound interest accelerates the growth of your savings over time. The sooner you start, the more you could earn.

Maximize your employer match. If your employer offers a retirement savings plan, such as a 401(k) plan, be sure to sign up and contribute as much as possible, but at the very least contribute to whatever your employer will match. Otherwise, you’re leaving free money on the table that could help you reach your retirement goal.

Plan for healthcare. Many people incorrectly assume that their healthcare costs will be negligible in retirement. But Medicare isn’t free, and the average 65-year-old will still pay hundreds of dollars in premiums. That doesn’t include out-of-pocket expenses for prescriptions, lab work, and hearing aids, not to mention vision and dental normally aren’t covered. Start solidifying a plan now that can set you up in the future, such as through a Health Savings Account (HSA).

Pay off debt. If you still owe on your mortgage, credit cards, or other debt, consider a plan to eliminate it before you retire. This will help stretch your retirement savings a bit further if you can rid yourself of monthly debt payments.

Seek help. Saving for retirement is a major undertaking and one that can be confusing and sometimes overwhelming. If you need help, ask. Most financial institutions have experts on hand that can guide you and help you develop strategies to reach your goals.

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